Dáil Éireann debate -
Tuesday, 15 Dec 1998

Vol. 498 No. 4

Written Answers. - Tallaght Hospital.

Alan Shatter

Question:

314 Mr. Shatter asked the Minister for Health and Children if he has received the Deloitte and Touche report into the finances of Tallaght hospital; the criticisms, if any, of the financial management of the hospital contained in the report; if he will furnish details of the projected financial overrun of the hospital for the year ending 31 December 1998; the reasons in this regard; and the additional finance, if any, he will make available to the hospital to address the difficulties that have arisen. [27565/98]

Minister for Health and Children (Mr. Cowen)

As the Deputy will be aware, I have received the Deloitte & Touche report and I gave copies to representatives of the board of management of the hospital on 9 December 1998. The Deputy will also be aware that I am today placing copies of the report in the Library and have arranged for a copy to be given directly to him.

The report refers to many criticisms of financial management at the hospital including the absence of audited accounts for 1997. The criticisms include "a lack of awareness throughout the organisation of the financial implications of spending decisions. Furthermore, no formal process exists to make managers accountable for the financial implications of decisions they are making"— page 33. The report does point out that the budgetary control systems in place in the new hospital essentially derive from the base hospitals where a system of centralised budgetary control "commonly found in other hospitals of their size, was used". Deloitte & Touche specify in the report the requirements for the development of a comprehensive budgetary control system.

The report also states that the new financial system needs to be implemented. It is noted in the report that the hospital plans to introduce this system fully by January 1999. The report states that "It is absolutely essential that the new financial system is implemented in the new hospital as soon as possible to provide reliable, meaningful information to managers on a timely basis." It also states that the consolidation of the personnel/payroll systems into one system is urgent.

With reference to controls, the report states that it is important that a review be carried out of internal control procedures in the hospital to assess their adequacy and operation in the new environment; a financial procedures manual be drawn up; the current vacancy in the internal audit function be filled as soon as possible, and a comprehensive programme of internal audit work be drawn up; staff briefings take place on the manner in which financial control procedures are to apply.

As the Deputy will be aware, the report confirms a total projected overrun by the hospital for 1998 ofcirca £17.5 million. This is made up of £13.2 million revenue overspend and a potential £4.3 million overrun of capital expenditure.

As I stated in the House last week, the projected net revenue deficit for 1998 iscirca £8.5 million following adjustment, in the normal way, in regard to the hospital's claim for additional funding such as for increased pension costs, special pay awards, PRSI and superannuation.

As the Deputy will be aware, the capital expenditure is currently being reviewed to establish if it was of a critical nature and absolutely essential to the opening of the hospital. I will consider whether any further capital funding is appropriate when I receive this assessment before Christmas.

Again as I stated in this House on 10 December, I informed the board of management of the hospital that I will not be funding the remaining £8.5 million revenue deficit, the funding of which is a matter for the board. I am adopting the same policy with this hospital as I have taken throughout the year with all other hospitals. How the Tallaght board of management propose to fund the deficit will be one of the important issues to be addressed in its formal response to me and the Department, which I have been informed by the chairman I will receive on Thursday next.